I need to calculate discounted sum for a variable in a panel data. My
data is like:
FirmID year income
100 1980 50000
100 1981 51000
100 1982 54000
100 1983 60000
100 1984 59000
100 1985 62000
101 1970 18000
101 1971 18500
101 1972 20000
101 1973 24000
Basically, the data is a panel data, grouped by "FirmID", with
hundreds of frims. What I need to do is to calculate a moving
discounted sum of income for each firm-year. That is, calculate a sum
of income from a firm's first year to the current year, but each
year's income will be discounted by that year's distance to the
current year and the discount rate is the inverse of the distance
"1/(current year - year +1)". For example, for firm 100 at 1982, this
calculation would be like: 54000 + 51000*1/2 +50000*1/3, while for
firm 100 at 1984 it would be like 59000 + 60000*1/2 + 54000*1/3 +
51000*1/4 + 50000*1/5. I tried the following program:
by FirmID: gen seq=_n
gen suminc=0
quietly forval i=1/`=seq' {
by FirmID: replace suminc = suminc + income[`i']/(`=seq' - `i' +1)
}
But problems are: 1) the loop seems not allowing "by" command; 2) the
loop does not really launch, because even after I get rid of "by
FirmID" the loop seems to go only one cycle instead of "_n" cycles.
Many many thanks for any help!
Robin Luo
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